Intellectual property in Brazil

Owning ideas

Getting serious about patents

IN 1809 the Portuguese crown granted authors and inventors exclusive rights to their works in Brazil for 14 years. Based on the English Statute of Monopolies, the law—only the fourth in the world to protect intellectual property—was aimed at developing the colony, where the court had fled to escape Napoleon. But by the mid-20th century Brazil had come to regard intellectual property—at least the foreign kind—as a threat. It banned most manufactured imports. Its patent office, INPI, could cap royalty payments and demand that local partners gain rights to imported know-how.

Unsurprisingly, such terms found few takers. Though Brazil did industrialise, it churned out mainly expensive, shoddy goods based on obsolete technology. Computers were so antiquated that Brazilian firms stuck with paper; and as for Brazilian cars, in 1990 the president, Fernando Collor, dismissed them as “carts”. That led to another about-face. Brazil re-opened its borders, joined the World Trade Organisation in 1995 and accepted international intellectual-property rules.

“Protecting their intellectual property is still one of the first worries our foreign clients raise,” says André Giacchetta of Pinheiro Neto, a São Paulo law firm. But today Brazil’s laws on patents, copyright and trademarks are in line with other big trading nations. More judges now understand intellectual-property law, and an appeal court has been set up in Rio de Janeiro to handle such cases. Trademarks still take too long to be registered. But INPI’s handling of patent applications is converging to that in rich countries (see chart).

There has been a cultural change, too. Mr Giacchetta has heard from Silicon-Valley clients that software and music piracy is slowly declining in Brazil: as incomes rise, the real thing becomes more accessible and, for many, a status symbol. “Instead of believing that it is essential to protect ourselves from foreign industry, we now realise that we must protect our own intellectual property to encourage innovation,” says Jorge Ávila, the president of INPI. “And we want foreigners to invest here. We don’t want them to think they won’t get a fair return.”

The discovery of oil in ultra-deep waters offshore has helped to change attitudes. Firms drilling in the new fields must spend 1% of gross revenues locally on research and development. That has attracted the likes of GE, Schlumberger and Halliburton to the country, as well as many smaller high-tech firms.

During the 1970s state investment made Brazil a world leader in sugar-cane ethanol. But that wave of innovation petered out. Mr Ávila hopes that more effective, and swifter, patent protection and a 2004 law granting universities greater rights to exploit spin-offs from publicly funded research will mean that innovation will now bear more fruit.